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Tuesday, February 8, 2011

End-Of-Day Recap - Tuesday 2/8

Trading accounts were on fire today with every position working (both long and short positions). Long-term accounts were dragged down by a 2.6% decline in SIO.V.

I didn't feel the need to trade a lot today. Took profit on 1/2 AAPL long @ 354.74 (+3.24) and 1/2 of remaining natgas short, HND.TO @ 9.39 (+1.55). I will try and update Why Natgas Is A Short later tonight with updated targets. My only purchases were a few shares in gold miner PKL.TO @ 0.82, and I added a little to my SIO.V long @ 1.14.

Gold and gold shares posted nice gains as well. I am long ABX and HBU.TO as per yesterday's update. TBT also continued its move higher after breaking out of the 39.50 area last week, closing up .74 @ 41.24.

Highlights:

ENS broke out today, clearing 34 and closing @ 34.91. I am long from 32.92.

AIXG tried to break above 44 on decent volume, but closed just under @ 43.88. Still up .92 on the day. Look for further increases in this name. I am long from 39.50.

One name to keep an eye on tomorrow will be WPRT. WPRT reported earnings after the close today. The initial reaction was to push it lower. It is currently trading around 15.10. I am still short form 15.73. If the move under 15.50 sticks tomorrow, it will open up the door for a move all the way down to 12 bucks.

@Anonymous The extent of my FA will vary by stock. Some companies, or commodities, I have a very intimite understanding of their underlying fundamentals. For others it's more a superficial understanding. I have a watch list of about 100 or so stocks that I have a good understanding of that I track on a daily basis. The rest of my trades are identified via chart patterns that I scan for.

The extent to which the fundamentals line up with the technicals will typically determine my position size. For example, if the stock is breaking out and the fundamentals are great I will trade in much larger size than if the fundamentals are less positive.

There are times where I will trade purely on technicals, but my position size will be smaller, and the holding period will typically be much shorter. I tend to put on these trades to keep myself busy and make a little extra $$ between trades. Conversely, except in exceptional circumstances, I never trade based on fundamentals alone - the technicals MUST be in agreement.

I ALWAYS use stops. The strength of my fundamental view, the chart pattern, and the position size are all factors in determining where I set my stop.